It is too close to call whether Ghana’s President John Mahama will win re-election in November, but on one score success is starting to look attainable: the government is on course to get through an election year without triggering a fiscal crisis.

In 2012, when the country last went to the polls, the budget deficit doubled to one of the highest rates in Africa as the ruling National Democratic Congress ramped up spending on civil service wages.

Politicians and economists say there is no evidence of a repeat of that spree this time around, however.

That could allay widespread market fears of the country crashing out of its three-year International Monetary Fund programme, despite Mahama and Finance Minister Seth Terkper having repeatedly stated their commitment to the deal.

The IMF said in its last review that the government has been sticking to the terms of the deal worth up to $918 million aimed at restoring economic balance and curbing the deficit.

An official close to talks with the Fund told Reuters that Ghana is on course to meet its requirements, despite spending pressures.

While some civil servants’ salaries more than doubled in 2012, spurring spending that quickly became unsustainable, a deal with civil service unions now limits wage increases to below inflation, union leaders have said publicly.

The scrutiny that comes with the IMF deal also reduces the likelihood that Mahama or opposition leader Nana Akufo-Addo will face economic turmoil when one of them is sworn in.

“The lessons of 2012 have been so visible for the government, and the fact that it’s taken them many years to correct the fiscal slippage in that year, so it’s something they are very much guarding against,” said Sampson Akligoh, managing director of Investcorp bank in Accra.

“I am confident that they will stay the course through the elections,” he said.

ELECTIONS AND ELECTRICITY
The National Democratic Congress’s overspending in 2012 and a slump in commodity prices that followed have hurt Ghana’s reputation as one of Africa’s brightest investment prospects.

Economic growth was nearly 15 percent in 2011, when prices were high for gold, cocoa and oil, but had fallen by 2015 to just 4 percent.
The next slice of IMF aid depends on Ghana passing a bill that would eliminate central bank financing of the fiscal deficit.

Its passage is uncertain, however, and the opposition New Patriotic Party will likely vote against it on the grounds that it imposes draconian limits on the central bank.

A government team flew to Washington this week to iron out differences over the bill and a separate issue of how to resolve the debts of state-owned enterprises, government sources said.

Mahama has embarked on a pre-campaign “Accounting to the People” tour to highlight spending on infrastructure, hoping that voters will overlook the hardships brought on by a period of austerity if there are visible signs of development.

It appears to be a tight race, however. Recent polls put the National Democratic Congress just 3 percent ahead of the opposition, with nearly 15 percent of respondents undecided, a senior source close to the government said.

Years of power cuts followed by higher electricity prices aimed at reining in spending have hurt consumers and manufacturing, which could lead voters to punish the incumbent.

“You can’t transfer the extra cost (of power) to the customer because their income hasn’t increased,” said Fred Kwofie, managing director of Domod Roofing, as he brought out invoices apparently showing that his power bill had risen about a third since the height of the blackouts in 2015, when he also had generator fuel to pay for.

But he was tight-lipped on whether this would lead him to vote for the opposition in November’s polls.